Business

Gas prices in Colorado steady but could increase 10 cents a gallon

Turmoil in Iraq caused gasoline prices to jump significantly across the U.S. last week, according to Gregg Laskoski, senior petroleum analyst for GasBuddy.com.

In Colorado — where at-the-pump prices have remained relatively stable, and far lower than the national average — the cost of a gallon of gas could surge by as much as 10 cents this week, Laskoski warned Monday.

Gas prices averaged $3.45 a gallon statewide Monday, compared with $3.44 last week. "That's not bad," he said. "A month ago you were exactly where we are now, at $3.45. And a year ago, Colorado was looking at $3.68."

Gasoline prices in Denver on Monday were averaging $3.42 a gallon, unchanged from a month ago. A week ago, the average cost of a gallon of gasoline was $3.40, compared with $3.67 a year ago.

Nationally, Monday's average of $3.65 a gallon compared to $3.62 one month ago and a year ago it was $3.61.

"Across the country, even in places that are doing well, we are seeing wholesale prices climb pretty significantly because of the rise in crude oil prices being driven by the situation in Iraq," Laskoski said. "We've seen wholesale prices just in the past week climb anywhere from 7- to 13-cents a gallon. That suggests that we are going to see similar climbs in retail prices."

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Colorado drivers are somewhat shielded from the much higher national average because of the oil that flows from oil fields in North Dakota and Canada. And before political unrest exploded in Ukraine and Iraq, GasBuddy was predicting that gasoline prices might fall this summer.

But Iraq is the second largest OPEC exporter behind Saudi Arabia, exporting approximately 3.5 million barrels a day.

Though most attention has been focused on Baghdad, Laskoski said "there is a major oil field to the northeast and there are also pipelines directly north of Baghdad."

That is causing a great deal of nervousness and prices for Brent crude oil, produced in the North Sea, and U.S.-produced crude are going up as a result, he said. West Texas Intermediate oil jumped to oil hit $107.54 a barrel Monday, the highest since September, and closed at $106.90.

"Any time you have volatility in energy it is almost inevitable that you are going to have higher crude-oil prices in the United States," he said. "We are expecting a short-term price hike. And with wholesale prices increasing as much as they have, we might see prices in Colorado and Denver go up by another 10 cents a gallon in the next week or two
."

If West Texas Intermediate crude prices approach $110 a barrel, there will be a lot of discussion in Washington, D.C., about a potential release from the U.S. strategic petroleum reserve, but that might not solve the price problem.

"Releasing oil from the strategic petroleum reserve could still create bottlenecks with refineries," Laskoski said.